Neighborhood-Based Subsidy Caps

Can Make Housing Vouchers
More Efficient and Effective

Neighborhood-Based Subsidy CapsThe Department of Housing and Urban Development (HUD) recently announced plans to expand a policy designed to help families with Housing Choice Vouchers move to areas with lower poverty and crime rates.

A new paper from the Center on Budget and Policy Priorities (CBPP) explains how “Neighborhood-Based Subsidy Caps Can Make Housing Vouchers More Efficient and Effective.”

The policy, known as “small-area fair market rents” (SAFMRs), ties voucher subsidy amounts to rents in a given neighborhood rather than an entire metropolitan area.

Early evidence suggests that SAFMRs enable voucher holders to live in higher-opportunity areas, which has benefits for families such as raising children’s college attendance and adult earnings.

Expanding use of SAFMRs would be an important step to broaden housing opportunities for voucher holders — and, importantly, requires neither congressional action nor additional funding.

In fact, because HUD’s plan would expand SAFMRs to replace a costly but apparently ineffective policy of raising voucher subsidies throughout certain metropolitan areas, it would likely reduce voucher costs, freeing up funds that could be used to assist additional families on voucher waiting lists.

Click here for more information from CBPP and to read the report.